Wednesday 23 October 2019

New truck market surge likely short-lived, say experts

The UK’s new truck market grew by 34 per cent in the first half of the year, with 27,464 vehicles registered, according to the Society of Motor Manufacturers & Traders (SMMT). But a much quieter second half is expected by industry experts, with the decline running into next year.

Demand for rigid trucks was up by 33.5 per cent, and tractor units by 35.3 per cent.

Factors beyond economic confidence have driven this demand: most notably the introduction of the next generation of ‘smart’ digital tachographs and the Euro 6 D emissions standard. But operators have also been ordering vehicles ahead of Brexit, fearing a no deal and the imposition of a 22 per cent tariff from November.

Martin Hay, managing director of Scania (Great Britain), pictured, right, said: “We believe many companies have already pre-purchased to reduce any risks of additional tariffs for any upcoming fleet replacements, which will then result in a declining total truck market in 2020.”

Operators have told Transport Operator of difficulties in getting firm quotes for vehicles for delivery after 31 October.

One said: “Even with a lease, rather than an outright purchase, the deal is questionable. A 20 per cent tariff would raise the front-end price, but the problem then is, if by the end of say a three-year lease, there has been a post-Brexit deal and the tariff reduced or abolished, then the residual will also take a hit.”

Limited supplies of smart tachographs (Transport Operator 82) have also distorted the market, say experts.
Phil Moon, marketing manager of DAF Trucks, said: “There was clearly a desire among British operators to refleet before 29 March, and this has continued. The smart tacho issue also served to pull forward demand ahead of June and constrain supply afterwards. There was no list price increase for vehicles fitted with a new instrument, compulsory from 15 June, but there was a cost of €1000 for fitting a smart tacho to a truck that had been delivered with an old instrument to allow it to be registered after that date.

“To be fair to the tachograph manufacturers, the spec for the new instrument was settled very late in the day, leaving little time to build up stocks before the new instruments became compulsory.

“The third quarter will see truck sales slow down a lot, irrespective of any Brexit effect, as a consequence of demand having been brought forward.”

Mike Hawes, SMMT chief executive, said of the figures: “A second strong quarter for truck registrations is certainly welcome news, however the swell in market size is undoubtedly due to operators choosing to expand their fleet ahead of the introduction of additional regulation.

“This significant performance means we may see the market level out throughout the second half of the year, especially given the role ongoing political and economic uncertainty could play in deterring further commitments to big fleet purchases.”

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